CMS is terminating its Medicare Advantage contract with American Health Plan of Texas after the insurer failed to meet minimum quality standards for three consecutive years.
The agency issued a notice of termination Dec. 17 to the Franklin, Tenn.-based company, which operates an institutional special needs plan serving approximately 495 Medicare beneficiaries in Texas. The insurer is owned by Michigan-based firm Mitchell Family Office.
The contract termination will take effect Dec. 31, 2026.
CMS said the plan failed to achieve a Part D star rating of at least 3 stars for three consecutive years, receiving a 2.5-star rating in 2024, 2025, and 2026.
CMS said it had previously put the insurer on notice of its low ratings, issuing corrective action notices in 2023, and early 2025. Alongside the termination, CMS is imposing intermediate sanctions effective Jan. 2, 2026, including a suspension on enrollment and a halt to all marketing activities. The sanctions will remain in effect until the termination date or until overturned on appeal.
